That is an insane amount to hire Johnny Ive. Just to signal to the market that OpenAI is getting into hardware, what on earth could they be building towards. They’ve been writing some big checks off late, these costs will have to be justified soon enough.
This is a bet that's as insane as the Apple car. They're going to try to get people to buy a specialized device from a company that isn't just a software company but really a B2B API company—the only successful consumer-facing product they have ever released was an accident, a tech demo that went viral.
And what exactly is that device going to do that the iPhone (and smartphones in general) can't already do with at a minimum a few small tweaks to the existing flagships?
In the right context vertical integration can make sense, but hardware is a big stretch for OpenAI right now. They haven't even really pinned down the consumer software angle yet.
Totally insane, $6.5B acquihire. But also, all stock deal and OpenAI appears to have an unlimited number of investors waiting to give them money if/when needed.
> I don't know why Jony Ive is seen to be worth billions, but he's obviously not.
Agreed. If it was the only option it would have been worth it to Apple to pay him billions to _leave_. His last 5-10 years at Apple were marked by him ruining a number of products.
Broadly, you're right, but again, there is an incredible amount of inequality at the moment, so while 90% of VCs might be strapped for cash, ther other 10% have so much that they are struggling to find worthy investment vehicles that can grow their money-pile.
Its a dillema they are in because nothing can justify the volume of investment enough without a sufficiant potential for growth, so any venture that even hints at big enough return, will find itself flush with cash it wont realistically know what to do with.
I've spoken to a small handful of investors who are all saying they have capital to deploy but don't know where. One of them in particular stepped away from AI but they were seeing OTT valuations for AI startups based on what other VCs were doing.
